Southeast Asia’s biggest airline AirAsia has signed a deal for 150 Canadian-made Airbus A220-300 jets, according to the two companies. The deal was announced at the plane-maker’s facility in Mirabel, Canada, representing the country’s biggest order.
AirAsia co-founder Tony Fernandes called it “the perfect tool for our next phase of growth.”
“This order reflects our long-term discipline and the scale of our ambitions,” he said in a statement.
“We have built AirAsia by making bold decisions at the right moment, not the easiest moment. This order reflects our long-term discipline and the scale of our ambitions. The A220 unlocks new markets and routes and brings us closer to building the world’s first true low-cost network carrier,” Fernandes said.
AirAsia said its more than 20-year relationship with Airbus has played a major role in the airline’s growth and achievements, describing the latest agreement as another important step in their long-standing partnership.
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The airline also said the deal includes the option to expand the order to as many as 300 aircraft from the A220 family to accommodate future demand.
Airbus Commercial Aircraft CEO Lars Wagner said the A220 planes will “open up new routes across Asia that were not feasible before.”
Airbus says that the A220 is the most modern airliner in its size category, carrying between 100 to 160 passengers on flights of up to 3,600 nautical miles (6,700 km). At the end of March, 501 A220s had been delivered to 25 operators worldwide, according to the airline.
This deal comes amid a rise in fuel prices, caused by the U.S.-Israeli war with Iran. AirAsia announced last month it was cutting more flights and even some connections without providing an overall figure. The airline also said it was also raising fares by up to 40 percent and about 10 percent of its overall flights had been cut so far at the time.
Wagner said he hoped once the new fleet is delivered in 2028, larger AirAsia aircrafts will be freed up to focus on long-haul routes to North America, Australia and Europe. Meanwhile, Fernandes told the Financial Times that the jet fuel shock triggered by the war is a bigger crisis for global aviation than the Covid-19 pandemic.
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“I thought I’d seen it all with Covid […] but having seen jet fuel go up almost three times — this is much worse,” Fernandes told the newspaper.
Fernandes also said in a LinkedIn post that the decision to move on the Airbus deal now is because “we never waste a crisis. AirAsia grew by making bold decisions at the right moment, not the easiest moment.”
Fernandes also talked about hedging costs to Bloomberg. “Obviously people who hedge now are in the money, but over a longer period, hedging never really works,” Fernandes said, though the decision has led to the company’s shares tumbling 35 percent, according to the publication. Fernandes also announced he is also preparing to launch a new airline in coming months.